The Free Market and Sustainable Energy

Can the free market adapt to our sustainable energy needs?

Environmentalism has played a large role in shaping the energy markets as they exist today. In much of the western world, new rules and regulations make it nearly impossible for companies to use fossil fuels in a free manner as they would like. In many locales, it is prohibited to emit a certain level of pollution into the air due to fossil fuel usage. Other countries offer tax incentives for other forms of sustainable energy, which is another form of taxing fossil fuels and promoting cleaner energy sources. Nonetheless, in most instances, the free market will dictate what costs people are willing to pay. Until people are willing to pay more money in order to protect the environment, alternative sources will not be pursued with such vigor.

Fossil Fuel Prices and Alternative Energy

One of the main reasons why alternative energy sources have become such an important part of the industry is because increase in fossil fuel prices over the past few decades. The increased demand from the developing and third world has caused the prices to increase. A dwindling supply in many countries is also causing the prices of fossil fuels to rise.

For alternative energy producers and promoters, this is both encouraging and discouraging at the same time. Even though the increased interest in alternative energy stems from the high energy demand, it also means that sustainable energy has to fill a large gap. Today, humans use far more energy than ever before and utilizing tidal, wind, and solar energy to replace all of this is going to be an expensive proposition.

Still, as long as fuel prices are continuing to rise, there is a future for investment in the alternative sources. Already, there are signs that many types of sustainable energy are able to work within the free market and remain profitable.

Successful Sustainable Energy Sources

Currently, there are many sustainable energy sources that have had great success. Wind energy is one of the biggest examples of success in the alternative sources industry. Many communities in flat regions are completely self-sustained, from an energy perspective, on the wind energy provided from wind farming. In comparison with many other alternative energy sources, this is funded largely by private companies and firms that are looking to make money. This has had a huge impact on the wind energy industry because they are no longer as reliant on government support.

Another industry leader that still requires some government support in order to grow is the solar industry. The sun radiates enough energy for much (if not all) of human needs, but capturing this energy has proved elusive. Solar panels are still relatively inefficient at collecting energy, but investment has provided a much needed boost. Today, efficiency with solar panels is approximately 21% at the highest level. There is much to be done before solar energy can meet the energy requirements of the earth’s inhabitants to this day.

Other forms of energy, such as algal fuel, are also being researched in universities and by environmental organizations as well. Much of this is in the early stages, but some of it may prove sustainable from a business perspective within the next few decades.

Sustainable Energy and the Marketplace

Many large companies and individuals are already noticing the great benefits that come with sustainable energy. Converting to solar energy a few years ago would have already yielded a return on investment from a financial point of view while also protecting the environment at the same time. As the alternative energy market becomes more efficient in collecting resources, it will increasingly compete on price parity with the fossil fuels that are used today. While it may take some time before this can happen, it is important to note that the market has a significant say in the future of these alternative sources.

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